Will Republicans Give Milwaukee a Sales Tax?

Key Republican leaders came to Milwaukee two weeks ago to meet with Milwaukee officials, including Mayor Cavalier Johnson and County Executive David Crowley and top metro area business leaders. Tim Sheehy, president and chief executive of Metropolitan Milwaukee Association of Commerce, called it a chance to “reset” the relationship of the city and county with Republican leaders of the Legislature and help Milwaukee with its revenue issues. “The exchange, questions, and listening, vs talking past each other, was a step forward,” Sheehy says.

In an interview with Urban Milwaukee, Johnson offered a contagious enthusiasm about his push to increase state shared revenue and give Milwaukee more leeway for a local sales tax. “I’m very optimistic on the issue,” he said. “We really engaged with the legislators.”

When campaigning for mayor, Johnson promised to “camp out” in the state Capitol and has already been there several times to discuss the issue, meeting with Republicans like Assembly Speaker Robin Vos and Senate President Chris Kapenga and in Milwaukee with Senate Majority Leader Devin LeMahieu.

But this is far from the first time legislators have been lobbied on this issue. As Urban Milwaukee has reported, Sheehy and the MMAC have been pushing behind the scenes for six years to get Republican leaders to support legislation allowing the city to levy a sales tax and the county to increase its sales tax. The rationale for this was described by Sheehy to Urban Milwaukee: “State shared revenue has basically flatlined since 1993, while annual state income tax collections have risen from under $4 billion to over $8 billion.” And that doesn’t include the huge growth in state sales tax revenue.

A significant amount of that growth in state taxes was paid by Milwaukee County residents, yet none of it has come back in the form of shared revenue since 1993, Sheehy noted. Looking only since 2009, an analysis by Milwaukee County shows its residents paid $500 million more each year in income and sales taxes to the state, or about $5 billion over the last decade. Meanwhile, in real, un-inflated dollars state shared revenue to Milwaukee County dropped by a total of $455 million over the last decade and declined by $118 million per year to the city, probably a loss in excess of $1 billion over the last decade, as Urban Milwaukee reported. That’s a total loss of $1.5 billion to Milwaukee County even as its taxpayers contributed an additional $5 billion to the state.

And Milwaukee has no way to recoup this massive loss in revenue, because the state bars the city from levying its own income or sales tax (while nearly ever big city in America can levy one or both) and has prohibited any increase in the tiny, 0.5% county sales tax (which the Legislature approved back in 1991). The state also caps the increase in property taxes the city and county can levy.

But however compelling the statistical rationale, most of the MMAC’s lobbying went on while Tom Barrett was mayor. And Republicans hated Barrett because he ran in the 2012 recall against Republican Gov. Scott Walker. The election of Johnson and Crowley has brought a new generation of leaders to the fore, not to mention both are Black leaders of a city with by far the largest percent of voters of color in Wisconsin. And both are pragmatic, solution-oriented Democrats: Crowley is a former legislator and Johnson has made crime, a big concern of Republicans, a high priority issue.

“Both Mayor Johnson, and County Executive Crowley are credible and direct on the challenges of public safety,” Sheehy says, “starting with the fact they both grew up in the most dangerous ZIP code in the city.”

“I think it does help that we are new generation of leaders,” Johnson says.

Not to mention that Johnson championed the successful bid to hold the Republican National Convention in Milwaukee, which had to win points with GOP legislators. So if there was ever an opportunity to improve the relationship between Wisconsin’s biggest city and the Legislature, this should be the time.

But it won’t be easy. For starters, the Legislature won’t be back in session until January 2023. No one, including Johnson, expects anything to get down before then.

And the politics on this are not favorable. There was a time when Milwaukee, as the state’s largest city, had to be courted, even by Republican leaders. GOP Governor Tommy Thompson did this assiduously, and carried heavily Democratic Milwaukee County every time he ran.

But today’s Republicans have made a living off of demonizing Milwaukee. Walker, in the 2012 recall, declared that people do not want to see Wisconsin “become another Milwaukee,” a potent issue for him even though he was a former Milwaukee official. And things have only gotten worse since then, as the ever wider partisan divide has pitted the turnout in Democratic Milwaukee and Dane counties against that of the heavily Republican WOW counties (Waukesha, Ozaukee and Washington) in state elections. Republican legislators like Janel Brandtjen win points by savaging Milwaukee and calling for cuts in state funding.

More recently Republicans attacked Milwaukee County District Attorney John Chisholm for supposedly letting criminals off the hook. LeMahieu brought this up after the meeting in Milwaukee, noting that “we need to make sure that there is an investment in law enforcement, especially the DA’s office so criminals are prosecuted.” But the DA’s office is a state mandated program the county administers, even as state funding for such mandates has declined. He might want to look in the mirror as to who caused this alleged disinvestment in prosecution.

All of this has gotten worse, of course, due to gerrymandering of Wisconsin, which has assured that Republicans can gain a majority of legislative seats with a minority of the state vote. This has resulted in a Legislature that allows a higher local sales tax to handle tourism in such rural towns as tiny Stockholm in western Wisconsin while denying this to Milwaukee, which has 1,985 times more tourism than Pepin County (where Stockholm is located), as Urban Milwaukee has reported.

In the past, Milwaukee business leaders could help with an issue like that. Sheehy is surely arguing that attracting tourism, businesses and executive talent to Milwaukee will be much more difficult if the city and county become financial disaster zones, which will begin to happen in 2023. “I think the business community is extremely important on this issue,” Crowley says.

But the other thing that happened under Walker and a gerrymandered Legislature was the creation of a more radical and rural Republican Party that doesn’t care as much about the concerns of big city business executives. Business leaders always favor spending on transportation, yet Walker turned down $800 million in federal funding for high speed rail. More significantly, in his eight years in office he never funded the $1.1 billion expansion of Interstate 94 west of Milwaukee long championed by Milwaukee’s business leaders. It has been left to a Democrat, Gov. Tony Evers, to push this, with Republican legislators continuing to resist.

If Evers is reelected, the gerrymandered Republican Legislature may continue to resist a sales tax for Milwaukee, or doing anything that makes Evers look good. Johnson and Crowley might have a better chance with legislators if Republican Tim Michels is elected governor.

Kathleen Gallagher, a guest commentator for the Journal Sentinel, has flatly predicted that Republican legislators won’t budge on the issue. But Johnson clearly believes he can get this done, and I wouldn’t count him out.

The mayor, by the way, doesn’t just want the Legislature to agree to a Milwaukee sales tax, but to commit to an increase in state shared revenue “back to what it once was.” If he can get both, he is some kind of political magician. Even getting half a loaf would be a huge victory and one that would likely come only with strings preventing the city from reducing its budget for the police. But that’s a bargain I suspect Johnson would gladly accept. Because without it, this city faces a certain and dreadful decline.